European Stocks Edge Higher; Corporate Earnings in Focus

© Reuters.

By Peter Nurse 

Investing.com - European stock markets are seen opening marginally higher Thursday, with investors looking to take their cues from the corporate sector on another busy earnings day.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.1% higher, CAC 40 futures in France climbed 0.1%, and the FTSE 100 futures contract in the U.K. rose 0.1%.

Stock markets have posted strong gains over the last few months on expectations that additional U.S. fiscal stimulus coupled with global vaccination programs would usher in a period of economic growth as the influence of the coronavirus pandemic waned.

However, the European markets have woken up Thursday to more muted trading elsewhere, with Wall Street closing marginally lower overnight and many countries in Asia-Pacific, including China, Japan and South Korea, shut for holidays.

With this in mind, the ongoing earnings season is likely to be the dominant driving force Thursday, with the banking sector in particular focus.

Credit Agricole (OTC:CRARY) reported net income of 124 million euros ($150 million) in the fourth quarter, despite a goodwill charge at its Italian unit. The Paris-based bank indicated that the worst of the Covid-19 pandemic may have passed, reporting lower provisions and a larger-than-expected return to dividends.

German lender Commerzbank (DE:CBKG) was less optimistic, saying that its revenue will probably shrink “slightly” this year after the bank reported a quarterly loss of 2.7 billion euros ($3.3 billion) after writing down asset values and booking costs for future job cuts.

On a busy day, investors will also be keeping an eye on reports from the likes of drugmaker AstraZeneca (NASDAQ:AZN), cosmetics company L’Oreal (PA:OREP), steel producer Arcelormittal (AS:MT), insurers Aegon (NYSE:AEG) and Zurich Insurance (SIX:ZURN) as well as drinks company Pernod Ricard (PA:PERP).

Oil prices weakened Thursday, as traders banked profits after a strong rally, despite a larger than expected drop in U.S. crude supplies raising hopes of a recovery in demand in the world’s largest consumer.

The U.S. Energy Information Administration recorded late Wednesday a draw of 6.64 million barrels for the week to Feb. 5, with crude stocks falling for a third straight week to their lowest level since March. A small addition had been expected.

The international benchmark Brent contract fell 0.5% to $61.19, after having risen for the previous nine sessions, its longest sustained period of gains since January 2019. U.S. crude futures traded 0.6% lower at $58.36 a barrel, with Wednesday having seen its eighth daily rise.

Elsewhere, gold futures rose 0.1% to $1,843.60/oz, while EUR/USD traded 0.1% higher at 1.2131.